No. C046055 COURT OF APPEAL OF CALIFORNIA THIRD APPELLATE ... COURT OF APPEAL OF CALIFORNIA THIRD

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Transcript of No. C046055 COURT OF APPEAL OF CALIFORNIA THIRD APPELLATE ... COURT OF APPEAL OF CALIFORNIA THIRD

  • No. C046055

    COURT OF APPEAL OF CALIFORNIATHIRD APPELLATE DISTRICT

    PRESTON PIPELINES, INC.,Plaintiff and Respondent,

    vs.

    JCW-CYPRESS HOME GROUP, et al.,Defendant and Appellant,

    ROSS F. CARROLL, INC.,Defendant, Cross-Complainant, and Respondent,

    ______________________________

    RESPONDENTS BRIEF______________________________

    On Appeal from the Superior Court of San Joaquin CountyCase No. CV015722

    Honorable Elizabeth Humphreys______________________________

    James J. Kroll, Jr., Esq., SBN 71553

    LAW OFFICE OF JAMES J. KROLL, JR.

    1115 Thirteenth Street, Suite A

    Modesto, California 95354

    Telephone: (209) 576-7777

    Facsimile: (209) 576-8437

    Tony J. Tanke, Esq., SBN 74054

    LAW OFFICES OF TONY J. TANKE

    322 Fowles Street,

    Oceanside, California 92054

    Telephone: (760) 439-5356

    Facsimile: (309) 410-5695

    Attorneys for Defendant, Cross-Complainant, and Respondent ROSS F. CARROLL, INC.

  • i

    TABLE OF CONTENTS

    TABLE OF AUTHORITIES ................................................................... vi

    INTRODUCTION ...................................................................................... 1

    STATEMENT OF FACTS ........................................................................ 4

    1. The Williams Companies Two-Subdivision ResidentialConstruction Project ........................................................... 5

    2. The Construction Contracts and Subcontracts ................ 7

    3. The Williams Companies Cause Delay and Extra Work ,Fail to Make Retention Payments, and Take UnearnedDiscounts ............................................................................... 8

    a. Withholding of Retention ......................................... 9

    b. Causes of Delay and Extra Cost ............................ 10

    c. Unearned Discounts and Payment Failures ......... 12

    4. This Lawsuit Was Brought and Prosecuted toJudgment ............................................................................ 12

    DISCUSSION ........................................................................................... 14

    I. APPELLANTS FAIL TO DEMONSTRATE AN ABUSEOF THE TRIAL COURTS DISCRETION TO PERMITAMENDED PLEADINGS TO CONFORM TO PROOFAT TRIAL .......................................................................... 14

    A. Contrary to Appellants Contention, Lack ofPrejudice, Not Alter Ego, Was the Basis of the TrialCourts Ruling and Is the Sole Issue on Appeal .. 15

  • ii

    B. Appellants Failures to Acknowledge the Standardof Review and to Demonstrate Actual Prejudice InTheir Opening Brief Have Waived Any Challengeto the Courts Order Allowing RCI to Amend .... 24

    C. Appellants Suffered No Actual Prejudice And CanShow No Abuse of Discretion From the CourtsRuling Granting Leave to Amend ......................... 27

    1. Appellants Themselves Voluntarily Chose toMake Bella Vista A Cross-Defendant toRCIs Claims By Answering RCIs Cross-Complaint ..................................................... 28

    2. Bella Vista Presented a Complete Defense onthe Merits Through Counsel of its OwnChoice ........................................................... 29

    3. Appellants Failed to Object to RCIsEvidence That Bella Vista Was Responsiblefor Delay Damages and Extra Expenses That Is, Until They Lost the Motion toAmend ........................................................... 34

    a. RCIs Introductory Statement of Facts............................................................ 34

    b. Exhibit No. 225 RCIs Allocation ofDamages Between Bella Vista andJCW-Dutra ........................................ 35

    c. Sean Carrolls Testimony About BellaVista-Caused Damage ...................... 36

    D. Appellants Due Process and IrregularityContentions Are Vapid and Do Not Overcome theCourts Discretion to Grant a Motion to Amend toConform to Proof .................................................... 37

    1. Bella Vista Received Due Process .............. 28

  • iii

    2. Appellants Are Not Entitled to aNew Trial ...................................................... 38

    II. APPELLANTS CONTENTION THAT RCIS DAMAGEAWARD WAS IN DEROGATION OF THE CONSTRUCTIONCONTRACTS IS BARRED ON MULTIPLE LEGALGROUNDS .................................................................................... 40

    A. Appellants Are Barred From Advancing the No-Invoice Argument by Procedural Default ............ 41

    1. The Incompetent Attorney Declaration ..... 41

    2. Failure to Raise the Argument During Trial .............................................................. 41

    3. Failure to Object to Any of the ExtrinsicEvidence ........................................................ 42

    4. Failure to Consider Express and ImpliedFindings or to Analyze the EvidenceSupporting Recovery ................................... 43

    B. Substantial Evidence Supports the Judgment onTheories of Contract Ambiguity, ExecutedContract Modification, and Waiver/Estoppel ...... 44

    1. Ambiguities in the Billing and the ExtraWork Clauses Justified the Admission andConsideration of Extrinsic Evidence toInterpret the Contracts ............................... 45

    2. The Judgment Is Supported By ExecutedAmendments to the Contracts Providing For Additional Compensation For ExtraWork ............................................................. 49

    3. Appellants Disregard the Trial CourtsExpress and Implied Findings of Waiver andEstoppel to Rely on the Invoice Clause ..... 54

  • iv

    a. Waiver ............................................... 55

    b. Estoppel ............................................. 57

    C. Appellants Have Failed to Shoulder Their Burdenof Showing Prejudicial Error In the Award ofDamages or Interest ................................................ 58

    III. APPELLANTS ASSERTIONS THAT RCIS CLAIMS WEREBARRED AS A MATTER OF LAW BY WAIVER ANDESTOPPEL DISREGARD THE DOCTRINE OF IMPLIEDFINDINGS AND THE SUBSTANTIAL EVIDENCE RULE .. 60

    A. Appellants New Waiver/Estoppel Defense IsBarred by Procedural Default ............................... 61

    1. Appellants Failed to Request Findings orOtherwise Raise Waiver/Estoppel atTrial .............................................................. 61

    2. Appellants Have Failed to Set Forth theEvidence and Findings Pertaining to the So-Called Issues of Waiver and Estoppel ....... 62

    B. Substantial Evidence Supports the Trial CourtsImplicit Rejection of the Newly-Minted Defenses ofWaiver and Estoppel .............................................. 63

    1. RCI Is Not Barred as a Matter of Law fromSeeking Unbilled Amounts from BellaVista .............................................................. 63

    2. To the Extent Appellants Have Not Waivedthe Issue, RCI is Legally Permitted to SeekReimbursement of Unearned DiscountsTaken by JCW-Dutra and Bella Vista ...... 65

    IV. THERE IS SUBSTANTIAL EVIDENCE OF BOTH THEEXISTENCE AND TERMS OF THE PAYMENT BOND ....... 67

    CONCLUSION ........................................................................................ 69

  • v

    CERTIFICATE OF WORD COUNT .................................................... 71

  • vi

    TABLE OF AUTHORITIES

    FEDERAL CASES

    Boddie v. Connecticut (1971) 401 U.S. 371 .............................................. 37

    Intel Corp v. Hartford Acc. & Indem. Co. (9th Cir. 1991)952 F.2d 1551 ............................................................................................ 56

    STATE CASES

    Alpert v. Villa Romano Homeowners Assn. (2000)81 Cal.App.4th 1320 ............................................................................. 32,33

    Ansco Const. Co. v. Ocean View Estates (1959) 169 Cal.App.2d 235 ...... 60

    Asdourian v. Araj (1985) 38 Cal.3d 276 .................................................... 49

    Arya Group, Inc. v. Cher (2000) 77 Cal.App.4th 610 ............................... 50

    Atari Inc. v. State Board of Equalization (1985)170 Cal.App.3d 665 ......................................................................... 43,61,66

    B.C. Richter Contracting Co. v. Continental Casualty Co. (1964)230 Cal.App.2d 491 ................................................................................... 54

    Board of Administration v. Wilson (1997) 52 Cal.App.4th 1109 .... 27,33,59

    Carr v. Barnabeys Hotel Corp. (1994) 23 Cal.App.4th 14 ...................... 23

    Cavanagh v. Keplinger (1928) 204 Cal. 19 .......................................... 50,54

    Childrens Hospital & Medical Center v. Belshe (2002)97 Cal.App.4th 740 .................................................................................... 42

    Chitwood v. Country of Los Angeles (1971) 14 Cal.App.3d 522 .............. 29

    City of Coachella v. Riverside City Airport Land (1989)210 Cal.App.3d 1277 ............................................................................ 43,61

  • vii

    City of Merced v. American Motorists Ins. Co. (2005)126 Cal.App.4th 1316 ............................................................................. 3,58

    Coit Drapery Cleaners, Inc. v. Sequoia Ins. Co. (1993)14 Cal.App.4th 1595 .................................................................................. 37

    County Sanitation Dist. No. 2 v. County of Kern (2005)127 Cal.App.4th 1544 ................................................................................ 25

    Cowles Magazines & Broadcasting, Inc. v. Elysium (1967)255 Cal.App.2d 731 ................................................................................... 41

    Crome v. Allen (1942) 52 Cal.App.2d 137 .......